1
Exhibit 10.1
FORM OF SUBSCRIPTION AGREEMENT
Enviro Industrial Technologies, Inc.
Enviro Industrial Technologies, Inc.
000 Xxxx 00xx Xxxxxx
Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
It is understood that the securities described below are being
offered for sale pursuant to an exemption from the registration provisions of
the Securities Act of 1933, as amended (the "Act") and in particular, Rule 504
of Regulation D.
1. Offering. Enviro Industrial Technologies, Inc., a Delaware
corporation (the "Company") is offering to Accredited Investors only, as that
term is defined in Rule 501(a) of Regulation D of the Act, an aggregate of
10,000,000 shares of the Company's common stock at $.10 per share (the
"Shares").
2. Subscription. The undersigned (hereinafter referred to as
the "Subscriber") hereby subscribes for the number of Shares set forth on the
signature pages hereof (Page 8 for an individual and joint purchasers and pages
9 and 11 for Corporations, Trusts and Partnerships). The entire purchase price
is due and payable upon the execution of this Agreement and shall be paid by
cash and/or promissory note, and/or a combination thereof. Checks should be make
payable to the order of "Xxxxx & Xxxxxxx LLP, as Escrow Agent for Enviro
Industrial Technologies, Inc." The Company shall have the right to reject this
subscription in whole or in part.
In order to participate in this offering, prospective investors are
required to complete, sign and return to Xxxxx & Schloss LLP, counsel for the
Company, at 0 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn:
Xxxxxx X. Xxxxx, (i) two signed copies of the Subscription Agreement and all
other documents required to be executed in connection with the issuance of the
Shares, (the "Subscription Documents") and (ii) payment to "Xxxxx & Schloss as
Escrow Agent for Enviro Industrial Technologies, Inc." in accordance with the
terms set forth on the signature page hereof.
The undersigned acknowledges that the Shares being purchased hereunder
will not be registered under the Act, or the securities laws of any State, that
absent an exemption from
2
registration contained in those laws, the issuance and sale of the Shares would
require registration, and that the Company's reliance upon any such exemption is
invariably based upon the undersigned's representations, warranties, and
agreements contained in this Subscription Agreement.
Subject to receipt of the Subscription Documents, payment for the
amount indicated herein and acceptance by the Company thereof, the Company will
issue the Shares in the name of each accepted Subscriber and forward them to the
Subscriber at the Subscriber's address appearing on the signature page of this
Subscription Agreement.
Upon acceptance of each Subscription Agreement by the Company, Xxxxx &
Xxxxxxx LLP, will forward the proceeds underlying this Subscription Agreement to
the Company and make arrangements for the issuance of the Shares. All proceeds
of the Offering will be used for working capital.
3. Representations, Warranties and Covenants of the Subscriber
3.1 The Subscriber, by executing and delivering this
Subscription Agreement, hereby represents and warrants to the Company:
(a) he and/or his attorney, accountant and/or his purchaser
representative have been afforded the opportunity to ask
questions of and receive answers from the officers and
directors of the Company concerning the terms and conditions
of the offering and to obtain any additional information which
the officers and directors possess or could acquire without
unreasonable effort or expense that is necessary to verify the
accuracy of the information provided to the Subscriber by the
Company.
(b) he either personally has such knowledge and experience in
financial and business matters to be capable of evaluating the
merits and risks of the proposed investment, or, together with
his purchaser representative, and his business and tax
advisors, on whose advice he has relied, had such knowledge
and experience;
(c) he realizes that the Shares constitute a speculative
investment involving a high degree of risk and he has adequate
means of providing for his current needs and possible personal
contingencies and he is able to bear the economic risks of the
investment (i.e., he can afford a complete loss of his
investment);
(d) he is aware that no trading market exists for the Shares
and that he may not be able to readily liquidate his
investment;
(e) he is at least 21 years of age and a bona fide resident of
the state of New Jersey (not a temporary or transient
resident) of that state and he has no present intention of
becoming a resident of any other state or jurisdiction or an
entity formed in the
2
3
United States doing business in the state hereinafter set
forth. As a resident of the state of New Jersey, he is aware
that:
THE ATTORNEY GENERAL OF THE STATE OF NEW JERSEY DOES
NOT PASS UPON OR ENDORSE THE MERITS OF ANY PRIVATE
OFFERING. NO OFFERING DOCUMENT HAS BEEN FILED WITH OR
OTHERWISE APPROVED BY THE DEPARTMENT OF LAW AND
PUBLIC SAFETY OF THE STATE OF NEW JERSEY. ANY
REPRESENTATIONS TO THE CONTRARY IS UNLAWFUL.
THE SHARES BEING PURCHASED HEREWITH ARE BEING
PURCHASED FOR INVESTMENT AND NOT WITH THE VIEW TO OR
FOR SALE IN CONNECTION WITH A DISTRIBUTION OF THE
SHARES. ANY RESALE OF THE SHARES SOLD IN RELIANCE ON
THE EXEMPTION PROVIDED BY N.J.S.A.49:3-50 WITHIN 12
MONTHS OF THE SALE SHALL BE PRESUMED TO BE WITH A
VIEW TO DISTRIBUTION AND NOT FOR INVESTMENT, EXCEPT A
RESALE PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE
UNDER N.J.S.A.49:3:61, 61.1 OR TO AN ACCREDITED
INVESTOR PURSUANT TO AN EXEMPTION AVAILABLE UNDER
N.J.S.A.49:3:50. THE SHARES ISSUED UNDER THE
EXEMPTION SET FORTH HEREIN MAY ONLY BE RESOLD
PURSUANT TO REGISTRATION OR AN EXEMPTION UNDER THE
UNIFORM SECURITIES LAW (1997), N.J.S.A.49:3-47.
(f) he is an "Accredited Investor" as that term is defined in
Section 2(15) of the Act and Rule 501 of Regulation D
promulgated thereunder. Specifically an Accredited Investor
is:
(i) A bank defined in Section 3(a)(2) of the Act, or
a savings and loan association or other institution
as defined in Section 3(a)(5)(A) of the Act, whether
acting in its individual or fiduciary capacity; a
broker or dealer registered pursuant to Section 15 of
the Securities Exchange Act of 1934; an insurance
company as defined in Section 2(13) of the Act; an
investment company registered under the Investment
Company Act of 1940 (the "Investment Company Act") or
a business development company as defined in Section
2(a)(48) of the Investment Company Act; a Small
Business Investment Company licensed by the U.S.
Small Business Administration under Section 301(3) or
(d) of the Small Business Investment Act of 1958; a
plan established and maintained by a state, its
political subdivisions or any agency or
instrumentality of a state or its political
subdivisions for the benefit of its employees, if
such plan has total assets greater than $5,000,000;
an employee benefit plan within the meaning of the
Employee Retirement
3
4
Income Security Act of 1974 ("ERISA"), if the
investment decision is made by a plan fiduciary, as
defined in Section 3(21) of ERISA, which is either a
bank, savings and loan association, insurance
company, or a registered investment advisor, or if
the employee benefit plan has total assets greater
than $5,000,000 or, if a self-directed plan, with
investment decisions made solely by persons that are
accredited investors.
(ii) A private business development company as
defined in Section 202(a)(22) of the Investment
Adviser Act of 1940.
(iii) An organization described in Section 501(c)(3)
of the Internal Revenue Code, a corporation, a
Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of
acquiring the securities offered, with total assets
greater than $5 million.
(iv) a natural person whose individual net worth, or
joint net worth with that person's spouse, at the
time of his or her purchase exceeds $1 million.
(v) A natural person who had an individual income
greater than $200,000 in each of the two most recent
years or joint income with that person's spouse
greater than $300,000 in each of those years and has
a reasonable expectation of reaching the same income
level in the current year.
(vi) A trust, with total assets greater than $5
million not formed for the specific purpose of
acquiring the securities offered, whose purchase is
directed by a sophisticated person as described in
Rule 506(b)(2)(ii) (i.e., a person who has such
knowledge and experience in financial and business
matters that he is capable of evaluating the merits
and risks of the prospective investment.)
(vii) an entity in which all of the equity owners are
accredited investors. (If this alternative is
checked, the Subscriber must identify each equity
owner and provide statements signed by each
demonstrating how each is qualified as an accredited
investor.)
(g) His overall commitment to investments which are not
readily marketable is not disproportionate to his net worth,
and the investment in the Shares will not cause such overall
commitment to become excessive.
(h) The funds provided for this investment are either separate
property of the undersigned, community property over which the
undersigned has the right of control, or are otherwise funds
as to which the undersigned has the sole right of management.
4
5
5. Common Stock. Holders of common stock are entitled
to dividends when and as declared by the Board of Directors from funds legally
available therefor and, upon liquidation, are entitled to share pro rata in any
distribution to shareholders after payment of any liquidation preference to
holders of preferred stock, if any. Holders of common stock have one (1)
non-cumulative vote per share held as to all matters voted on by the
stockholders of the Company.
6. Escrow Provisions -- Appointment of Escrow Agent
6.1. The Company and Subscriber hereby appoint the
Escrow Agent and the Escrow Agent hereby accepts its appointment as Escrow Agent
pursuant to the terms and conditions hereinafter set forth.
6.2. The Company shall cause the Shares to be issued
in the name of the Subscriber and delivered to the Escrow Agent. Escrow Agent
shall deliver the Shares to the Subscriber in accordance with the instructions
of the Subscriber upon receipt by the Escrow Agent of the Purchase Price and the
Shares within ten (10) days of transmission of funds to the Company by the
Escrow Agent.
6.3. It is understood and agreed by the parties to
this Agreement as follows:
(a) The Escrow Agent is not and shall not be deemed
to be a trustee for any party for any purpose and is
merely acting as a depository and in a ministerial
capacity hereunder with the limited duties herein
prescribed.
(b) The Escrow Agent does not have and shall not be
deemed to have any responsibility in respect of any
instruction, certificate or notice delivered to it
other than faithfully to carry out the obligations
undertaken in this Agreement and to follow the
directions in such instruction or notice provided in
accordance with the terms hereof.
(c) The Escrow Agent is not and shall not be deemed
to be liable for any action taken or omitted by it in
good faith and may rely upon, and act in accordance
with, the advice of its counsel without liability on
its part for any action taken or omitted in
accordance with such advice. In any event, its
liability hereunder shall be limited to liability for
gross negligence, willful misconduct or bad faith on
its part.
(d) The Escrow Agent may conclusively rely upon and
act in accordance with any certificate, instruction
notice, letter, telegram, cablegram or other written
instrument believed by it to be genuine and signed by
the Company and Subscriber.
(e) The Company and Subscriber agree to save
harmless, indemnify and defend the Escrow Agent for,
from and against any loss, damage, liability,
5
6
judgment, cost and expense whatsoever, including
attorney's fees, suffered or incurred by it by reason
of, or on account of, any misrepresentation made to
it or as to its status or activities as Escrow Agent
under this Agreement except for any loss, damage,
liability, judgment, cost or expense resulting from
gross negligence, willful misconduct or bad faith on
the part of the Escrow Agent.
(f) The Escrow Agent shall not be required to defend
any legal proceeding which may be instituted against
it in respect of the subject matter of this
Agreement. If any such legal proceeding is instituted
against it, the Escrow Agent agrees promptly to give
notice of such proceeding to the Company and
Subscriber. The Escrow Agent shall not be required to
institute legal proceedings of any kind.
(g) The Escrow Agent shall not, by act, delay,
omission or otherwise, be deemed to have waived any
right or remedy it may have either under this
Agreement or generally, unless such waiver be in
writing, and no waiver shall be valid unless it is in
writing, signed by the Escrow Agent, and only to the
extent expressly therein set forth. A waiver by the
Escrow Agent under the terms of this Agreement shall
not be construed as a bar to, or waiver of, the same
or any other such right or remedy which it would
otherwise have on any other occasion.
(h) The Escrow agent may refrain from taking any
action other than keeping all property held by it in
escrow if it is uncertain concerning its duties or
rights under this Escrow Agreement or receives claims
or demands from any person or entity or receives a
final judgment by a court of competent jurisdiction
if it deems that necessary or advisable.
7. Miscellaneous
7.1 All notices or other communications given or made
hereunder shall be in writing and shall be delivered by hand or mailed by
registered or certified mail, return receipt requested, postage prepaid, to the
undersigned, at the respective address set forth herein, and to the Company at
the addresses set forth above.
7.2 Subject herein to anything contrary hereto, this
Agreement shall be governed by and construed in accordance with the laws of the
state of New York applicable to contracts made and wholly performed in that
state.
7.3. This Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof and may be
amended only by a writing executed by the party to be bound thereby.
6
7
7.4 This Agreement is not transferable or assignable
by Subscriber.
7.5 All references in this Agreement to the
"Subscriber" shall include all parties (other than the Company) who execute this
Agreement. If the Subscriber is a corporation, partnership, trust or two or more
individuals purchasing jointly, note the specific instructions for the
Certificate of Corporate, Partnership, Trust and Joint Purchases at page 9
hereof. Please date and sign the certificate.
7.6 All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural as the
identity of the person or persons may require.
8. Acceptance of Subscription. It is understood that this
subscription is not binding upon the Company until the Company accepts it, and
that the Company has the right to accept or reject this subscription in whole or
in part in its sole and complete discretion. If this subscription is rejected in
whole, the Company shall return the Payment to Subscriber, without interest, and
the Company and Subscriber shall have no further obligation to each other
hereunder. In the event of a partial rejection of this subscription, a pro rated
amount of the Payment will be returned to Subscriber, without interest.
7
8
IN WITNESS WHEREOF, this Agreement has been executed
by the Subscriber and by the Company on the respective dates set forth below.
Number of Shares Price Per Share Amount of Purchase Price
x $.10 = $
-------------- -------------------
Individual Signature(s):
----------------- -------------------------------
Date Signature of Subscriber
----------------------- -------------------------------
Social Security No. Printed Name
----------------------- -------------------------------
Telephone No. Street
-------------------------------
City State Zip
-------------------------------
Signature of Co-Subscriber
-------------------------------
Printed Name
-------------------------------
Xxxxxx
-------------------------------
Xxxx Xxxxx Zip
Subscription Accepted by:
Enviro Industrial Technologies, Inc.
By: Date:
------------------------------------- ---------------------
Xxxxxxxx X. Xxxxxx
Chairman
8
9
IN WITNESS WHEREOF, this Agreement has been executed by the Subscriber
and by the Company on the respective dates set forth below.
Number of Shares Price Per Share Amount of Purchase Price
x $.10 = $
-------------- -------------------
For Corporations, Trusts and Partnerships:
------------------ -------------------------------------
Date Printed Name of Subscriber
By:
----------------------------------
Signature of Authorized Signatory
-------------------------
Tax Identification No.
------------------------- -------------------------------------
Telephone No. Printed Name of Authorized Signatory
-------------------------------------
Street Address of Subscriber
-------------------------------------
City State Zip
Subscription Accepted by:
Enviro Industrial Technologies, Inc.
By: Date:
------------------------------------ --------------------
Xxxxxxxx X. Xxxxxx
Chairman
9
10
SPECIAL SUBSCRIPTION INSTRUCTIONS FOR CORPORATE,
PARTNERSHIP, TRUST, AND JOINT PURCHASERS
If the subscriber is a corporation, partnership, trust, or other entity
or joint purchaser, the following additional instructions must be followed.
INFORMATION ADDITIONAL TO THAT REQUESTED BELOW MAY ALSO BE REQUIRED BY THE
COMPANY IN SOME CASES.
I. Certificate. The subscriber must date and sign the Certificate
below, and, if requested by the Company, the subscriber may also be required to
provide an opinion of counsel to the same effect as this Certificate or a copy
of (a) the corporation's articles of incorporation, bylaws and authorizing
resolution, (b) the partnership agreement, or (c) the trust agreement, as
applicable.
II. Subscription Agreement
A. Corporations. An authorized officer of the corporation must
date, sign, and complete the Subscription Agreement with information concerning
the corporation. The officer should print the name of the corporation above his
signature, and print his name and office below his signature.
B. Partnerships. An authorized partner must date, sign, and
complete the Subscription Agreement with information concerning the partnership.
The partner should print the name of the partnership above his signature, and
print his name and the words "general partner" below his signature.
C. Trusts. In the case of a trust, the authorized trustee
should date, sign, and complete the Subscription Agreement with information
concerning the trust. The trustee should print the name of the trust above his
signature, and print his name and the word "trustee" below his signature. In
addition, an authorized trustee should also provide information requested in the
Subscription Agreement as it pertains to him as an individual.
D. Joint Ownership. In all cases, each individual must date,
sign, and complete the Subscription Agreement. Joint investors must state if
they are purchasing the Shares as joint tenants with the right of survivorship,
tenants in common, or community property, and each must execute the Subscription
Agreement Signature Page.
10
11
CERTIFICATE FOR CORPORATE, PARTNERSHIP,
TRUST, AND JOINT PURCHASERS
If the subscriber is a corporation, partnership, trust, joint
purchaser, or other entity, an authorized officer, partner, or trustee must
complete, date, and sign this Certificate.
CERTIFICATE
I hereby certify that:
a. The subscriber has been duly formed and is validly
existing and has full power and authority to invest in Enviro
Industrial Technologies, Inc.
b. The Subscription Agreement has been duly and
validly authorized, executed, and delivered by the subscriber
and, upon acceptance by the Company, will constitute the
valid, binding, and enforceable obligation of the subscriber.
Dated: , 2000
---------- -------------------------------------------
Name of corporation, partnership, trust or
joint purchases (please print)
-------------------------------------------
Signature and title of authorized officer,
partner, trustee, or joint purchaser
11
